Damn It, Netflix Is Testing Ads

The company hasn't confirmed whether it will roll ads out on a wider scale, but it's experimenting with showing advertisements at the beginning and ending of streaming content for people watching on Xbox 360. Motherboard's Jason Koebler described the experiment as "the HBO model" since it's only showing ads for its own original content, just like HBO does.

The company is only showing trailers for shows like Orange Is the New Black and House of Cards -- it has not attempted to sell third party ads, and the company told me that, for the moment, only specific users in specific markets are seeing ads.

Nothing gold can stay.

Netflix has a jumbo bucket of money to gain from introducing third-party ads, especially since its powerful recommendation software means it has a leg up in targeting. Some analysts say the company needs ads to be profitable. And while people are pissed about the test ads, competitors like Hulu Plus already have them. As long as people aren't disgruntled enough to cancel their subscriptions in droves, it will help the company.

All beauty fades into oblivion.

I could see Netflix introducing a tiered pricing system at some point; I've asked for more information about the test ads, and whether the company is considering a premium membership for people who can't deal with ads interrupting their Friday Night Lights binge.

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